Talking About Money Difficult For LGBT Investors, According to Wells Fargo Study

Fewer Than Half In Same-Sex Marriages Seek Professional Guidance, Despite Ongoing Confusion Around Current Marriage Laws And Regulations

SAN FRANCISCO, June 26, 2014

One year after a Supreme Court decision and subsequent court decisions on same-sex marriage, Lesbian, Gay, Bisexual and Transgender (LGBT) investors still struggle to understand changing laws and are concerned about the financial and legal implications involved, according to a recent Wells Fargo survey. A majority of those surveyed (83%) do not fully understand how federal and state laws apply, including two-thirds (67%) of those who are currently in legal same-sex marriages. Despite the confusion, fewer than half surveyed (47%) who are in same-sex marriages or partnerships have sought guidance to help them figure out how recent court rulings and laws impact them personally.

Having Conversations

The survey showed that LGBT couples have a strong focus on the financial benefits and risks of marriage, but many LGBT couples are not having conversations about money. Just 37% of those surveyed who are in same-sex partnerships say new marriage laws have prompted new conversations about money. One in five (21%) report they rarely or never talk about money, while 25% say they talk about money “a lot.” More than one-third of survey respondents (38%) also admit that discussions about money have caused tension in their relationships.

More importantly, less than one-third of recently-married LGBT respondents have reviewed key components of their overall financial health for any changes or adjustments after getting married, including:

Emergency savings (33%)

A written retirement savings or investment strategy (28%)

A plan or strategy to reduce debt (23%)

A careful budget to manage spending (19%)

“So much has changed in the year since the DOMA rulings, and today same-sex couples can legally marry in nineteen states and the District of Columbia,” said Katherine Dean, Managing Director of Wealth Planning, Wells Fargo Private Bank. “These changes, however, don’t appear to be spurring on conversations about financial issues like saving, investing, and preparing for retirement. When the laws change in a relatively short amount of time, however, there are typically more questions than answers. As an industry, it’s incumbent upon us to provide the kind of information LGBT couples need to make sound decisions so they can achieve their financial goals.”

Seeking Advice

With recent changes in laws affecting same-sex relationships, more than half of surveyed LGBT investors (53%) would value professional guidance on wills and estate plans. A third would value help with powers of attorney (35%), tax issues (35%) and retirement planning (33%). Almost a quarter would value guidance on investing (24%) and beneficiary designations (23%). The survey found that needs vary among LGBT investors depending on their marital status.

Most of those surveyed have a preference for working with professionals who understand the unique needs of the LGBT community. Sixty-two percent of LGBT investors feel the financial considerations and needs of same-sex couples are different from heterosexual couples, but only half (49%) say they would feel comfortable walking into their local bank and talking about financial issues that affect them as an LGBT person.“

Every legislative action that affects domestic partnerships has the potential to impact the financial situations and investment goals of LGBT investors,” added Dean. “As financial issues become increasingly complex, LGBT investors see the merits of working with financial professionals specifically trained to understand the unique needs of LGBT couples.”

The current study showed that:

Seventy-four percent prefer working with financial professionals who have other LGBT customers

Fifty-two percent prefer working with financial professionals who are LGBT themselves

Currently, LGBT investors give mediocre grades to their primary banks or financial institutions with which they do the most business. The average grade for being LGBT-friendly was a B; for being knowledgeable about new laws impacting LGBT customers, they received a C+; and for addressing the needs of LGBT customers, they received a C+.

Sixty-one percent of LGBT investors want to be married now or sometime in the future. Of this group, only 54% say commitment and love are the most important reasons to get married (vs. 80% in the U.S. overall), while 36% cite financial and legal rights as the most important reasons to get married (compared to 8% in the U.S. overall). The top three rights and benefits of marriage that LGBT investors believe to be most important are:

The Accredited Domestic Partnership Advisor (ADPA) program was created, through a partnership with the College for Financial Planning, to educate advisors about the unique needs and financial considerations of same-sex couples and domestic partners. Financial advisors who earn this designation are well equipped to work with domestic partners and lesbian, gay, bisexual, and transgender (LGBT) clients to develop a thoughtful approach to help identify and work toward their financial goals. Wells Fargo Advisors created ADPA in conjunction with the College for Financial Planning. Today, Wells Fargo Advisors has more than 100 ADPA-certified financial advisors nationwide, more than any other firm in the country.

For more information on financial services offered to LGBT individuals and couples, please visit www.wellsfargo.com/LGBT.

About the Study

These survey findings are based on an online survey conducted April 8 – April 25, 2014 among 875 Lesbian, Gay, Bisexual, or Transgender (LGBT) investors nationwide. Qualified respondents were non-students, ages 25-75, who are the primary or joint financial decision-maker in the household with household investable assets of at least $25,000. Survey results are weighted to reflect the overall LGBT population in the U.S. based on LGBT and same-sex relationship status. The survey also included a national comparison sample of 400 general population investors, weighted to reflect current Census data for gender, age, race, ethnicity, household income, and region. Assuming no sample bias, the maximum margin of error is ±3% for the LGBT sample and ±5% for the full U.S. sample.

About Versta Research

Versta Research is a full-service market research firm, headquartered in Chicago, IL, specializing in customized strategic market research and public opinion polling. For more information, visit www.VerstaReserach.com.

About Wells Fargo Wealth, Brokerage and Retirement

Wells Fargo Wealth, Brokerage and Retirement (WBR) is one of the largest wealth managers in the U.S., with $1.6 trillion in assets. WBR includes Wells Fargo Private Bank, serving high-net-worth individuals and families; Wells Fargo Advisors, the third-largest brokerage firm in the U.S.; Wells Fargo Retirement, which manages $310 billion in employer-sponsored retirement plan assets for 3.7 million Americans; and Abbot Downing, serving ultra-high-net-worth individuals and families. Wells Fargo Advisors is the trade name used by two separate registered broker-dealers: Wells Fargo Advisors, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, non-bank affiliates of Wells Fargo & Company.

About Wells Fargo (Twitter @WellsFargo)

Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.5 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 9,000 locations, 12,500 ATMs, and the internet (wellsfargo.com), and has offices in 36 countries to support customers who conduct business in the global economy. With more than 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2014 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially. Wells Fargo perspectives and stories are also available at blogs.wellsfargo.com and at wellsfargo.com/stories.